---

see below

More ... latest change: 2025-02-26

GeneDx is a genetic testing company that specializes in advanced genomic testing, particularly for rare and ultra-rare genetic disorders.

The stock has surged over 2,500% since the start of 2024, making it one of the year’s top performers. This steep growth reflects the company’s reported success in significantly increasing revenue while stemming its cash burn.

We believe the company’s growth is largely an illusion, driven by fraudulent schemes and illegal tactics deliberately aimed at exploiting Medicaid and Medicare systems to artificially inflate revenue.

Testimonies from former employees and ongoing litigation suggest that GeneDx has inflated its revenue through an illegal practice known as “code stacking”. This tactic enables the company to bill insurance providers for services that do not meet the required criteria. Code stacking is prohibited since 2013.

Notorious microcap fraudster Phillip Frost’s OPKO Health sold GeneDx to Sema4 for only approximately $330 million. Sema4’s operations shut down almost entirely following the acquisition. Only 1.5 years later, GeneDx is now worth $2 billion on the stock exchange, nearly seven times the selling price.

CEO Katherine Stueland and CFO Kevin Feeley have consistently sold their shares immediately upon vesting, without ever engaging in open market purchases. This pattern suggests that insiders may be aware of an imminent risk that will significantly impact the company.

GeneDx, before its name change from Sema4, had a dispute with UnitedHealthcare in 2022, resulting in a settlement to repay $42 million over four years. Our research reveals that the reason for this dispute was unbeknownst to investors due to fraudulent code stacking.

According to multiple former employees, the company has continued the illegal code stacking practice, which we estimate inflates revenue by approximately 25%.

A former Vice President of the company stated that the scale of the code stacking scheme necessitates the active involvement of key executives, including CEO Katherine Stueland, CFO Kevin Feeley, and Chief Technology & Product Officer Matt Davis.

We anticipate that Medicare, Medicaid, and other health insurers will seek to recover overpayments made to GeneDx due to illlegal code-stacking practices.

During our research we became aware of an undisclosed whistleblower action against GeneDx. Whistleblowers told us that the company is operating illegal “independent” counselor entities that direct patients exclusively to GeneDx testing services.

Industry sources indicate that the Department of Justice is ramping up efforts to combat Medicare and Medicaid fraud, with a particular focus on scrutinizing billing practices. Over $800 million in fines were already issued against perpetrators and we believe that GeneDx is next in line for a hefty fine.

Since the name change from Sema4 to GeneDx, ex-employees testify that the company’s relationship with Mount Sinai, the prestigious school and hospital network, has worsened.

Former employees testify that the company’s previous healthcare data platform, Centrellis, was all smoke and mirrors. GeneDx was using it to tout itself as a data company rather than a diagnostics company to gain a higher multiple on the stock market. They would have required billions of dollars and several additional years of effort to achieve the company’s objectives for Centrellis.

Clinical geneticists and industry experts have expressed concerns that GeneDx’s tests do not offer superior accuracy compared to competitors, and the company lacks any sustainable competitive advantage in the marketplace.

GeneDx is facing internal morale issues after Katherine Stueland laid off more than half of the company’s staff. Many former employees cite nepotism and favoritism towards ex-Invitae employees.